How are Construction Companies Handling Compliance Reporting
Compliance refers to whether or not a business is compliant with federal, state, or local regulations. It can also refer to whether or not a subcontractor is compliant with the documentation or insurance requirements of their general contractor. A company that isn't following those regulations or contract requirements is non-compliant.
As a result, it is critical that companies effectively manage compliance. If they do not prioritize tracking these requirements for all of their contractors, they may face fees or disputes.
How are companies handling compliance today?
Tracking and managing compliance typically falls on accounting or project management teams. The tedious and time-consuming process of requesting and verifying Certificates of Insurance (COIs) and obtaining updated certifications as they expire is usually carried out via outdated methods, such as email or fax.
In most cases, these employees are not compliance specialists and often juggle other responsibilities simultaneously, leading to compliance taking a backseat. As a result, companies face challenges in ensuring compliance, resulting in non-compliance penalties, legal costs, project delays, and a general lack of oversight in this critical area.
Through outsourced professionals
Companies that want to avoid the inefficiencies and hassles of manual processes and the costs and risks associated with non-compliance may outsource compliance tracking and management to third-party vendors. These external companies have trained professionals dedicated to enforcing and verifying compliance documents. By entrusting compliance to a third party, companies can benefit from an additional layer of risk management, as these professionals have the time, expertise, and resources to manage this process effectively.
Construction companies increasingly use software solutions to manage compliance with greater flexibility and control than manual processing or outsourcing. Software solutions like FlashCOI, MyCOI, or Ebix provide companies more flexibility and control than processing COIs manually or outsourcing compliance management to another company. Compliance software solutions can improve compliance management by streamlining the process, reducing errors, and providing real-time access to documentation across projects and vendors.
A combination of the above
Companies may use a combination of the above to maximize risk management efforts. End-to-end software solutions combined with outsourcing to professionals often provide the combination of efficiency through automation and the detailed touch of a human being. Software empowers GCs to enforce compliance requirementsbeforesubmitting invoices and stops payments unless those conditions are met. Adding fully managed compliance services means the company does not have to spend time chasing down those documents- a professional does it for them and ensures that each document is set up correctly.
What is the impact of compliance reporting?
To help companies better understand and manage their compliance reporting, Flashtract compiled resources, studies and data. We found ripple affects across projects, finances and even schedules as a result of how well compliance was handled. Luckily, studies show that taking a few key steps to prevent problems before they arise can reduce costs associated with non-compliance by half.
If you’re curious about how your company can more efficiently track COIs and compliance report, simply let us know what email you would like us to send it to.